A critical look at ASML's long term projections and assumptions
The main concern I have with ASML is that they're largely a play on Moore's law, which is slowing down, and could come to a halt in the coming decade - you can't scale smaller than the size of an atom. For each new node that TSMC and the likes move to, they need to buy more and more ASML tools, especially EUV, to enable this shrinkage. However, once that growth driver levels off, demand for ASML tools will shrink. The company's tools are actually so good that each one they've sold is still in operation! This is great, but not from a business perspective. I bought a huge chunk of ASML in '16 and sold it in the tech bubble of '21. But definitely a great company.
Thanks for an insightful article! Not sure if you got any feedback regarding the the power data?
Anyway, I got curious about it to so did some quick calculations.... Wennink mentioned 24 000 terrawatt hours (TWh) of electricity - which would be the total of energy consumed that year.
To get to the capacity needed to produce that amount, you take the total amount of hours per year (24x365=8760) and then the "efficiency rate" of each power generation technology - wind or solar - and then you can calculate the capacity needed to produce.
So if we use a global average - i.e. wind 26% and solar 14% (average global efficiency data calculated from numbers on capacity and production I found in "Our world in data")
- Assuming that ALL that 24000TWh of energy would be produced from wind it would imply an semis content of roughly EUR 32 bn and if all was solar - EUR 78 bn....
We still need to address potential competitor to ASML from China. Those sanctions are forcing the Chinese to do something about this. If they don't a whole bunch of industries will collapse. I am sure they don't take that lightly.
Another masterpiece of analytical reporting. Many thanks.